Inter-temporal preferences Several periods model Indirect utility function of period T-1 V_(Wr-1)=max u(c-1+SEu(w DR T-12x7-1 First order condition U(CTD=SEu(CR E(xn)(R1-R0)=0Inter-temporal preferences • Several periods model: – Indirect utility function of period T-1. – First order condition: 1 1 1 1 1 1 1 , ( ) max ( ) ( ) T T T T T T T c x V w u c Eu w c R  − − − − − − − = + − 1 1 0 ( ) ( ) ( )( ) 0 T T T u c Eu c R Eu c R R  − =   − =